STRAYER EDUCATION INC
FORM 8-K
(Unscheduled Material Events)
Filed 5/4/2004 For Period Ending 4/23/2004
Address
1100 WILSON BLVD., SUITE 2500
ARLINGTON, Virginia 22209
Telephone
703-247-2500
CIK
0001013934
Industry
Schools
Sector
Services
Fiscal Year
12/31
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 4, 2004
Strayer Education, Inc.
(Exact name of registrant as specified in its charter)
Maryland
000-21039
52-1975978
(State or other jurisdiction of
incorporation or organization)
(Commission File
Number)
(I.R.S. Employer
Identification No.)
1100 Wilson Boulevard Suite 2500 Arlington, VA
22209
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (703) 247-2500
Not applicable
(Former name or former address, if changed since last report)
Item 12. Results of Operation and Financial Condition
As previously announced, on May 3, 2004, the management of Strayer Education, Inc. (the "Company") made a
series of management presentations to investors and others at the Company's Investor Day 2004. As stated in the
announcement, the presentations were also webcast through the Company's website. A copy of the materials that
accompanied the presentations is attached to this Form 8-K as Exhibit 99.1 and is incorporated herein by
reference. The webcast, as well as the attached materials, will remain available through the Company's website at
www.strayereducation.com until December 31, 2004.
The information contained herein shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section,
nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or
the Exchange Act.
2
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly authorized.
Strayer Education, Inc.
Date: May 4, 2004
By: /s/ Mark C. Brown
Mark C. Brown
Senior Vice President and Chief Financial Officer
3
EXHIBIT INDEX
Exhibit
99.01
Description
Management presentations conducted at the Company's
Investor Day 2004 on May 3, 2004.
4
Making Education Achievable for Working Adults
Investor Day
May 3, 2004
Safe Harbor Language
This presentation contains statements that are forward-looking and are made pursuant to the
"safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995 ("Reform
Act"). The statements are based on the Company's current expectations and are subject to a
number of uncertainties and risks. In connection with the Safe Harbor provisions of the
Reform Act, the Company has identified important factors that could cause the Company's
actual results to differ materially. The uncertainties and risks include the pace of growth of
student enrollment, our continued compliance with Title IV of the Higher Education Act and
the regulations thereunder, as well as state and regional regulatory requirements,
competitive factors, risks associated with the opening of new campuses, risks associated with
the offering of new educational programs and adapting to other changes, risks associated
with the acquisition of existing educational institutions, risks relating to the timing of
regulatory approvals, our ability to implement our growth strategy, and general economic
and market conditions. Further information about these and other relevant risks and
uncertainties may be found in the Company's annual report on Form 10-K and its other
filings with the Securities and Exchange Commission, all of which are incorporated herein by
reference and which are available from the Commission. We undertake no obligation to
update or revise forward-looking statements.
Robert Silberman
Chairman and Chief Executive Officer
Chairman and Chief Executive Officer
Joined Strayer Education, Inc. in
2001 as Chief Executive Officer
Previously served as the President
and Chief Operating Officer of
CalEnergy Company, Inc. and was
the Assistant to the Chairman and
Chief Executive Officer of
International Paper
Served during the first Bush
administration as U.S. Assistant
Secretary of the Army
Received an undergraduate degree
in History from Dartmouth College
and a masters degree from The
John Hopkins University School of
Advanced International Studies
Agenda
Academics Overview
Marketing Overview
Operations Overview
Campus Management & Faculty Development Overview
Strayer University Online Overview
Financial Overview
Tour of Washington D.C. campus
Dinner
Our Mission
Making Education Achievable for
Working Adults
Our Vision: To Build a Nationwide University
Maintain High Academic Quality
Ensure Stable Performance
in Our Mature Markets
Open New Campuses
Internal Growth
Expand Strayer University Online
Develop Corporate /
Develop Corporate /
Institutional Alliances
External Growth
Careful Deployment of Excess Cash
Strayer Education, Inc. Leadership
Board of Directors
Strayer Education, Inc.
NASDAQ: STRA
Chief Executive Officer
Board of Trustees
Strayer University
Pres.
Strayer
Univ.
VP
Online
Ops.
VP
Campus
Ops.
SR VP&
General
Counsel
SR VP
& CFO
VP
Mktg. &
Admin.
VP &
CTO
VP
HR
VP
Corp.
Comm.
Strayer Education, Inc. Board of Directors
Chairman: Robert S. Silberman
Presiding Outside Director: Steven B. Klinsky
CEO, New Mountain Capital, LLC
Audit Committee
Chair: Gary Gensler
Compensation Committee
Chair: David Coulter
Nominating Committee
Chair: William Brock
Chair: Gary Gensler
Former U.S. Under
Secretary of the Treasury
Thomas Waite
CFO, Humane Society
of the United States
Todd Milano
President and CEO,
Central Pennsylvania
College
Chair: David Coulter
Chair: William Brock
Vice Chairman, J.P.
Morgan Chase & Co.
Robert Johnson
Chairman, BRIDGES
Learning Systems, Inc.
Robert Grusky
Founder and CEO,
B.E.T.
David Wargo
New Mountain Capital,
LLC
Charlotte Beason
President, Wargo &
Company, Inc .
Former Chair,
Commission on
Collegiate Nursing
Education
Strayer University Board of Trustees
Chair: Scott W. Steffey
Former Vice Chancellor of the State University of New York
Vice Chair: Donald R. Stoddard, Ph.D. (University of Pennsylvania)
Former President Strayer University
Charlotte Beason, Ed.D. (Harvard University)
Former Chair, Commission on Collegiate Nursing Education
Roland Carey
Instructor, Louisa County Public School System of Virginia
Eliot Cohen, Ph.D. (Harvard University)
Director of the Phillip Merrill Center for Strategic Studies, Johns Hopkins University
Todd Milano
President and CEO, Central Pennsylvania College
Peter Salins, Ph.D. (Syracuse University)
Provost and Vice Chancellor Academic Affairs State University of New York
Jennie Seaton, Ph.D. (University of Kentucky)
Assistant Dean, Virginia Commonwealth University
Thomas Waite
CFO, Humane Society of the United States
Strayer University: Serving Students
Business Functions
Strayer Education, Inc.
CEO
Academic Functions
Vice President
Operations
Strayer University
President
Regional Director
Regional Dean
Campus Manager
Campus Dean
STUDENTS
Four Operating Units
Region I: Pennsylvania, Maryland, Washington D.C.
Region II: Virginia
Region III: North Carolina, South Carolina, Tennessee,
Georgia
Strayer University Online: Worldwide
Building a Management Team
Vision Leadership Seminar
Goals:
To identify potential candidates for upward mobility into key
management positions (Campus Deans, Campus Managers, Corporate
Managers)
To meet and observe candidates
Provide insight and information into the industry, Strayer University’s
strategy, and key operating areas
Encourage networking among peers
4 day program plus ongoing follow-up via newsletters, Intranet
Nomination and selection process
Active promotion of Vision participants when openings arise
Making Education Achievable for Working Adults
Academic Overview
J. Chris Toe, Ph.D.
Strayer University President
J. Chris Toe, Ph.D.
President, Strayer University
Joined Strayer University in 1993 as
an adjunct professor and was named
president in April 2003
Has held positions including Director
of Graduate Programs, Campus Dean,
Regional Dean, and Provost
Began career as an economist in the
Republic of Liberia and served on the
economics faculty at Texas Tech
University
Received undergraduate degree in
economics from the University of
Liberia and holds a masters and Ph.D.
in economics from Texas Tech
University
Agenda
Brief History, Mission and Locations
Academic Programs
The Strayer University Experience
The Strayer University Experience
Assuring A Quality Education
What Our Students Say About Us
Strayer University
Serves working adults
Founded in 1892
20,000 students
Accredited by Middle States Commission on Higher
Education
Authorized to operate in 7 states and the District of
Columbia
Strayer University Campuses
29 physical campuses, 7 states
and the District of Columbia
Strayer University Online
classes offered worldwide
Strayer University – Academic Governance
Educational standards ensured by strong academic
governance structure
Board of Trustees
President
Regional Deans
Deans of Academic Development and Training, and Student Affairs
Directors of Graduate Studies, Programs/Policy, Institutional
Research and Assessment, Academic Records, and Academic
Information Technology
Campus Deans
Department Heads and Discipline Advisors
Academic Programs
Graduate: Prepare students for upper-level management and senior
technical positions
Master of Business Administration
Master of Education*
Master of Health Services Administration*
Master of Public Administration*
Master of Science
Communications Technology
Information Systems
Management Information Systems
Professional Accounting
Executive Graduate Certificate Programs
Business Administration
Computer Information Systems
Professional Accounting
*New; not offered at all locations
Academic Programs
Undergraduate : Prepare specialists and generalists
Bachelor of Science
Associate in Arts
Accounting
Accounting
Business Administration
Computer Networking
Acquisition and Contract
Management
Business Administration
Database Technology
Computer Information Systems
Economics
Computer Networking
International Business
Database Technology
Internetworking Technology
Economics
Computer Information Systems
General Studies
General Studies
Internetworking Technology
Marketing
The Strayer University Experience
Diploma/
Certificate
2%
Non-program
4%
The Strayer University Experience
The Strayer University Experience
Average Length of Study
Average length of study is 8 quarters (as our students usually have
some prior credit)
Average student takes 2 classes per quarter
Graduation Rates
Approximately 62% of Strayer University’s full-time students graduate
and approximately 80% of Strayer University full-time seniors will
graduate
The Strayer University Experience
Faculty Profile
Full-time: 146; Adjunct: 755
All full-time have graduate degrees
Significantly diverse
Teach, advise students, develop programs and curricula and render
professional and community service
Subject-area expertise
Classes Taught
Full-time faculty
37%
Part-time faculty
63%
Assuring A Quality Education
Strategy
Embed learning outcomes in all courses
Hire, train and mentor faculty
Evaluate faculty and audit classes
Internal and external peer review
Solicit accreditor feedback
Solicit employer feedback via Curriculum Advisory Boards
Survey alumni, non-returning and current students regularly
Assuring A Quality Education
Key Staff
Regional Deans
Dean of Academic Development and Training
Director of Institutional Research and Assessment
Campus Deans
Department Heads
Faculty
Assuring A Quality Education
Input to Curriculum Development Process
Students
Faculty
Curriculum Advisory Board
University
State
Discipline
Assuring A Quality Education
Institutional Assessment Model
Student Learning
Student Learning Outcomes Assessment Program
Student Opinion Poll
Program
Academic Program Review
University
Student Satisfaction Survey
Alumni Survey
Non-Returning Student Survey
Faculty End of Course Survey
Graduating Senior Survey
Employee Satisfaction Survey
What Our Students Say About Us
90% of Current Students
Rate their overall experience as good or excellent
Indicate the University is having a substantial impact on meeting
their educational goals
Indicate the University is having a substantial impact on meeting
Indicate the University is having a substantial impact on meeting
their professional goals
Would recommend Strayer University to their friends and
colleagues
Agree that the University faculty understand the challenges of
being a working adult and student
Agree Strayer University respects them as adult learners
What Our Students Say About Us
Alumni
84% rate their overall experience as good or excellent
Over 75% indicate their preparation in research and problemsolving skills was good or excellent
68% obtained a new professional position or promotion since
graduation
On average, AA graduates earn $48,333 annually, BS graduates
earn $62,656 annually and Master’s graduates earn $72,320
annually
What Our Students Say About Us
Non-returning Students
83% agree the education they received at the University was of a
high quality
73% would recommend Strayer University to friends and
colleagues
Personal and professional commitments are the most common
reasons for not returning
Commitment to Academic Quality
Making Education Achievable for Working Adults
Academic Overview
J. Chris Toe, Ph.D.
Strayer University President
Making Education Achievable for Working Adults
Marketing Overview
Lysa Hlavinka
Vice President of
Marketing and Administration
Marketing and Administration
Lysa Hlavinka
Vice President of Marketing
Joined Strayer Education, Inc. in 2001
as Vice President of Marketing
Began career as account executive at
an advertising agency and joined
University of Phoenix in 1990
While at the University of Phoenix she
held positions as Marketing Manager,
Director of Administrative Services,
and National Director of Advertising
Taught marketing and public relations
courses as adjunct faculty member at
the University of Phoenix
Received undergraduate degree in
Advertising from Arizona State
University and an MBA from the
University of Phoenix
Agenda
Strayer University’s Marketing Objectives
Strayer University’s Marketing Objectives
The Strayer University Brand
Our Students
Marketing Mix
Lead Generation and Management
Corporate Alliances
Marketing Objectives
Strong branding and messaging
Sharpened focus on working adults
Targeted marketing
Monitoring of leads
Develop actionable data on marketing sources, aging of
leads, and conversion rates
Respond mid-cycle to market conditions
Defining the Brand
University
Adult students
Convenient locations
Flexible structure
Efficient to earn a degree
Professional environment
Solid reputation
Business and technology
Fair cost
Strayer University Brand Positioning
Combines quality of a traditional university education with
flexibility and convenience
Exists for one purpose – to provide adults with a higher
education that opens the door to opportunity
Accomplished through
delivery of a tailored university experience
delivery of a tailored university experience
combines a family-like support structure
real-world career-focused teaching
an atmosphere that understands adults learn best when they are
treated like adults
The “Strayer University” Logo/Tag Line
Shield = stability, strength
1892 = year of founding, reliability
Column = academics
Strayer not used without the word University
Used in brochures, ads, web site, campuses
“We Fit Your Life”
Applying the Brand: Marketing
Consistent messaging across all media and all customer
contacts
All ads, even direct response ads, contribute to brand
awareness and credibility
Advertising
Applying the Brand: Service
Customers evaluate the brand with each interaction they
have with a Strayer University faculty or staff member
All staff and faculty must believe in and support the brand
Vision Training
Management and staff training
Communication
Physical facilities are also important to the maintenance of
the brand – have applied consistent design to all new
campuses and refurbishing older campuses
Who are our students?
Adults, not due to age, but due to place in life
Adults, not due to age, but due to place in life
Diverse in age, income, ethnicity, marital status
Demographics of average student:
Average age is 34
At least high school/some college education (master’s leads have
bachelor’s degree)
Employed; average income $35K
Family
Takes two classes per quarter on nights, weekends, online
What we know about our students
Challenged by demands of work, family
Careful – consider lots of options, want reassurance
Motivated – desire to seek opportunity
Consider the decision to return to school for many years
When they finally contact schools, they’re ready to act
Marketing Mix
Broadcast
Network TV
Cable TV
Radio
Newspaper advertising
Major market papers: main news and business section, special
education sections
Community College papers
Military papers
Out of Home advertising (metro stations, buses, billboards)
Marketing Mix
Internet
Web site listings (i.e., Yahoo, FastWeb, ClassesUSA)
Search engines
Banner ads (local sites)
Pop-up ads (ad networks)
Direct Mail
Outreach
Exhibitions at expos, conferences, career fairs
Corporate outreach through Corporate Liaisons
Applying the Marketing Mix
Varies by Market
Objectives
Awareness
Ease of generating leads in market
Expense of market
Flexible
Within quarter to respond to lead flow
Quarter to quarter depending on results
Market to market depending on above factors
Basic Approach to New Markets
Basic Approach to New Markets
Introduction/Name Awareness
TV (network or cable)
Radio
Outdoor
Lead Generation
Direct mail
Internet
Outreach
Advertising creative is specific to new market
Lead Generation
Lead = someone who requests information
Methods of contact
70% come through the Internet
15% from direct mail
10% phone calls
5% walk-in
Distributed to the campuses
Entered, tracked, analyzed
Lead Management
Telephone responses through toll-free numbers are routed
to campuses
Direct mail and internet leads are distributed centrally from
the Marketing Department
Walk-ins, outreach, referrals, personally developed leads
go directly to campuses
Admissions officers follow up with leads
As leads “age,” ongoing contacts are made from campuses
and centrally from the Marketing Department
Marketing Costs
Average University cost per lead $50-150
Average University cost per student acquisition $500-1500
Corporate Alliances
Benefits to the Corporate Alliance Partner
Targeted services
Employee benefits
Job development
Benefits to Strayer Education
Potential large recurring volume
Minimal credit risk, direct payment of tuition
Faculty recruitment
Direct outreach to nearly 90 corporations and institutions
AT&T
Boeing
Computer Services Corporation
Northrop Grumman
Raytheon
UPS
PEPCO
Verizon
SAIC
Dept. of Defense
U.S. Postal Service
Lockheed Martin
Making Education Achievable for Working Adults
Marketing Overview
Lysa Hlavinka
Vice President of Marketing
Making Education Achievable for Working Adults
Operations Overview
Jim McCoy
Vice President of
Campus Operations
Campus Operations
Jim McCoy
Vice President of Campus Operations
Joined Strayer University in 1994 and
has been active in proprietary education
for past 22 years
Since joining Strayer has held positions
as Campus Manager, Campus Dean,
Director of Compliance, and Regional
Director
Received undergraduate degree in
Political Science from Lander College
and earned his MBA from Strayer
University
Agenda
Three Geographic Regions
Structure of the Regional Office
Responsibilities of the Regional Office
Strayer University Regions
Region I
Philadelphia, Pennsylvania (2)
Baltimore, Maryland (3)
Washington, D.C. (4)
Region II
Northern Virginia (5)
Richmond, Virginia (3)
Norfolk, Virginia (2)
Region III
Raleigh-Durham, North Carolina (2)
Charlotte, North Carolina (2)
Greenville, South Carolina (1)
Nashville, Tennessee (1)
Memphis, Tennessee (2)
Atlanta, Georgia (2)
(opening summer 2004)
Campus Reporting Model
Vice President
Campus Operations
University President
Regional Director
Regional Dean
Campus
Campus
Campus
Campus
Role of the Regional Office
Support campus operations
Coordinate and provide training to campus personnel
(Campus management, admissions and student services
staff)
Campus
staff)
Coordinate the implementation of University policies at the
campus level
Facilitate outreach to area corporations and organizations
to address educational/training needs
Regional Office Staffing Model
Vice President
Marketing
Vice President
Campus Operations
Vice President IT
Regional Office Responsibilities
Regional Support Officers
Bench strength to supplement campus personnel
Regional Corporate Liaisons
Develop corporate outreach activities
Regional Marketing Manager
Coordinate quarterly advertising plans
Regional Office Responsibilities
Regional Career Development Officer
Assist students and graduates to develop career advancement skills
Regional IT Coordinator
Assist campus management with information technology requirements
Training
Quarterly
Regional Campus Manager and Campus Dean workshops
Regional Student Services workshops
Regional LRC Specialist workshops
New Employee Orientation workshops
On-going
Mentoring for new Campus Managers, Campus Deans, and
Student Service Officer
On-site and off-site training of new Admissions Officers
Managing Enrollment Growth
Responding to demand
Three regions with functional regional support staff – detailed
management oversight and support
Vary the number of admissions officers at campuses to match
lead flow
Expanded relationship and outreach to corporations
Improved student services
Targeted training every term, on-the-spot training as necessary
Daily review of marketing data
Notional Campus Growth Rate
Target average student growth rate at year end
1 st year
150 students
2 nd year
300 students
3 rd year
450 students
4 th year
600 students
5 th year
750 students
6 th year
900-1,000 students
New Campuses
11 new campuses in operation 3 years or less
4,100 students during Winter 2004 quarter
127% enrollment growth Winter 2004
24 full-time faculty, 172 adjuncts
Work closely with Strayer University Online
Start-up capital expenditures: $500,000 to $1,000,000
(leasehold improvements, computer fit out)
New Campus Model
Approximately 12,000 square feet
6-8 classrooms that can accommodate 20 students per class
2-3 computer labs
Mature Campuses
14 campuses in operation over 3 years
14,000 students
3-10% enrollment growth rate since Q1 2001
127 full-time faculty, 326 adjuncts
Facility capacity of 1,000 – 1,500 students
Mature Campus Model
21,000 square feet
16-18 classrooms that can accommodate 20
students per class
4-5 computer labs
Average 1,200 students at capacity
Site Selection Strategy
Identify target cities and assess regulatory issues
Review demographics, population trends, employers,
competition, and educational attainment
Map target population and commuting patterns, survey
available facilities
2004 New Sites Update
In the spring term Strayer University opened 2 new
campuses
One in Greenville, SC; and
A second Memphis, TN campus
In the summer, we will open two new campuses in Atlanta,
GA; and
In the fall quarter we plan to open a third campus in
Pennsylvania
Operations Summary
In summary, the goal of campus operations is to:
In summary, the goal of campus operations is to:
Meet the demands of the adult learner
We do this by:
Locating campuses in convenient locations
Providing a practical job oriented curriculum to meet demand; and
Ensuring each student’s experience is a quality one
Making Education Achievable for Working Adults
Operations Overview
Jim McCoy
Vice President of
Campus Operations
Making Education Achievable for Working Adults
Campus Management and
Faculty Development Overview
Kristin Jones
Dean of Academic
Development and Training
Kristin Jones
Dean of Academic Development and Training
Has been active in education field for
past nine years and joined Strayer in
1998
Prior to joining Strayer University she
taught within the Virginia Community
College System
Since joining Strayer has held
positions as Admissions Officer,
Campus Manager, Campus Dean, and
now Dean of Academic Development
now Dean of Academic Development
Received undergraduate and graduate
degree in English from Virginia Tech
Currently enrolled in doctoral program
of higher education at Nova
Southeastern University
Agenda
Campus Academics
Campus Operations
Key Departments
Daily Campus Activities
Case Studies
Faculty Development
Campus Model
Campus Dean
Academic responsibility for the campus
Faculty, adjuncts, scheduling, student counseling, class audits,
registration support, evaluations and academic committees
Reports to Regional Dean
Campus Manager
P&L responsibility for the campus
Admissions officers, student services, lab monitors, learning
resource center, and facilities
Reports to Regional Director
Academic Organizational Chart
Campus Organization
Administrative Organizational Chart
Campus Organization
Review of Key Departments
Academics (reports to campus dean)
Teaching and Instruction
Course Scheduling
Academic Advising
Faculty Recruitment and Assignment
Student Retention
Review of Key Departments
Admissions (reports to campus manager)
Recruitment/Registration
Community Outreach
Student Services (reports to campus manager)
Accounts Receivable/Payable
Student Aid Programs
Library and Computer Lab Resources
Facility Maintenance
Daily Campus Activities
Daytime :
Recruitment/Retention
Collections Activities
Student Use of Facilities
Evening :
Evening Courses
(Traditional/Online)
Student Use of Facilities
Daytime Courses
(Traditional/Online)
Supplementary Facility
Usage
Case Study: Henrico Campus
Henrico Campus – Richmond, Virginia
Opened for classes – Fall 1998 (Mature Campus)
Facility size 20,800 sq/ft., which supports administrative
operations, 12 classrooms, 4 computer labs, and a Learning
Resource Center
15 full-time campus administrative personnel, 7 full-time faculty
members, and 18 adjunct faculty members
Major area employers include Capitol One, Verizon, Federal
Reserve Bank, and the State of Virginia
Reserve Bank, and the State of Virginia
*Source – U.S. Census Bureau 2000 Quick Facts
Case Study: Cary Campus
Cary Campus – Raleigh-Durham, North Carolina
Opened for classes – Summer 2002 (New Campus)
Facility size 12,900 sq/ft., which supports administrative
operations, 7 classrooms, 3 computer labs, and a Learning
Resource Center
13 full-time campus administrative personnel, 2 full-time faculty
members, and 11 adjunct faculty members
Major area employers include SAS, American Airlines, IBM, and
the State of North Carolina
*Source – U.S. Census Bureau 2000 Quick Facts
Faculty Development Program
Objective
To support and facilitate the professional growth and correlative
personal growth of the faculty.
Strategies for Faculty Development
Faculty Candidate Teaching Evaluation
New Faculty Orientation
Mentor Programs
Faculty Workshops
Faculty Development Resource Center
Participation in Professional Conferences and Meetings
Professional Development Plans for Faculty
Examples of Faculty Development Strategies
Faculty Candidate Teaching Demonstration
Required element of hiring process for all part-time and full-time
faculty
Includes 30-minute teaching demonstration
Presentation evaluated by campus dean, campus department head, and
senior faculty
New Faculty Orientation
Required orientation for all part-time and full-time faculty
Provides consistent, comprehensive overview of the university
(including its history, policies/procedures, and teaching expectations)
Mentor Program
Assigns all new adjunct faculty members with mentors from the same
area of expertise in which they will be teaching
Provides additional forum for new faculty to receive assistance
Examples of Faculty Development Strategies
Faculty Workshops:
Offered several times a year in a variety of formats
Provide faculty with information on the latest higher education issues
Professional Development Plans:
Annual requirement for part-time and full-time faculty
Allow faculty members to define and document professional goals
Provide an opportunity to establish strategies for continued development
Summary
Our unique campus model ensures campus managers and
campus deans work together to promote quality for the
students we serve
students we serve
Strayer focuses on the goal of ensuring academic quality in
all aspects of its campus operations
Making Education Achievable for Working Adults
Campus Management and
Faculty Development Overview
Kristin Jones
Dean of Academic
Development and Training
Strayer University Online
Pamela Bell
Vice President of
Online Operations
Pam Bell
Vice President of Online Operations
Joined Strayer University in 1995
Since joining Strayer has held positions as
Admissions Counselor, Distance Learning
Coordinator, Online Academic Dean, and
Director of Strayer University Online
Experience organizing, establishing and
implementing online distance learning
programs in educational and governmental
environments
Previously held position as Assistant Vice
President at SAIC
Received undergraduate degree in Political
Science and History from the University of
Tennessee, holds a master’s degree in
Business Management from Webster
University and a master’s degree in
University and a master’s degree in
Communications Technology from Capella
University
Agenda
Introduction to Strayer University Online
Strayer University Online Growth and Academic Quality
Asynchronous Demonstration
Synchronous Demonstration
Complimentary Educational Program
Mirror and Compliment Strayer University's Traditional Campus
Programs
Provide Alternative Educational Delivery Options to meet our
Adult Learner Needs
Focus on Academic Quality
Faculty Training
Instructional Designed and Faculty Develop Courses
Ongoing Evaluation of our Program Offerings
Strayer University Online
In operation with Synchronous courses since 1997
Introduced Asynchronous in 2001
9,068 full-time Strayer University Online students
74% enrollment growth over last fall (out-of-area)
17 full-time faculty, 259 adjuncts
Approximately 631 courses offered this quarter, 517
asynchronous; 115 synchronous
Strayer University Online Growth
Courseware Delivery Options
Asynchronous
Course Content Accessible 24/7
Collaborative Interaction
Audio and Presentations
Discussions and Online Activities
Tracking and Monitoring Options
Technical Support Provided
Technical Support Provided
Degree Programs
Courseware Delivery Options
Asynchronous
Courseware Delivery Options
Courseware Delivery Options
Synchronous
Real-time Delivery
Audio and Chatting Capabilities
White Board
Recorded Sessions
Technical Support Provided
Course Information Assessable 24/7
Degree Programs
Courseware Delivery Options
Synchronous
Courseware Delivery Options
Synchronous
Course Demonstrations
Course Demonstrations
Summary
Mirror and Compliment Strayer University's Traditional Campus
Programs
Provide Alternative Educational Delivery Options to meet our
Adult Learner Needs
Focus on Academic Quality
Strayer University Online
Pamela Bell
Vice President of
Online Operations
Making Education Achievable for Working Adults
Financial Overview
Mark C. Brown
Senior Vice President and
Chief Financial Officer
Chief Financial Officer
Mark C. Brown
Senior Vice President and Chief Financial Officer
Joined Strayer Education, Inc. in 2001
as Chief Financial Officer
Previously served as the Chief
Financial Officer of The Kantar
Group, the information and
consultancy division of WPP Group
Held a variety of management
positions at PepsiCo Inc. including
Director of Corporate Planning and
Business Unit CFO
Began career as a CPA with
PricewaterhouseCoopers
Received undergraduate degree in
Accounting from Duke University and
a MBA from Harvard University
Agenda
2003 Financial Highlights
2003 Financial Statements Review and Discussion
New Campus Economics
Internal Financial Controls
2004 Guidance
2003 Review
Opened five new campuses
Grew Out-of-Area Online at 66%
Sold student loan portfolio
Sold campus facility
Initiated share repurchase program
2003 Review*
% Change
2002
2003
Average Enrollment
14,026
16,849
20%
Revenue (M)
$116.7
$146.4
25%
Operating Income (M)
$41.2
$50.5
23%
Operating Margin (%)
35.3%
34.5%
(0.8) pts.
Net Income (M)
$26.2
$32.3
23%
EPS
$1.81
$2.17
20%
Distributable cash flow (M)
$26.6
$33.0
24%
* Excludes 2002 costs related to secondary and 2003 gains from asset sales
Strayer Financial Statements
Income Statement
Balance Sheet
Cash Flow
Statement
P&L – Revenue
Revenue
Revenue Drivers
Enrollment
Tuition
Other
% growth
vs. prior
year
12%
19%
* Excludes gain from sale of assets.
26%
25%
Funding a Strayer Education
Note: approximate percentages; vary by quarter
Revenue - Enrollment
Average Enrollment
Growth
vs. P.Y.
9%
13%
18%
20%
Revenue - Tuition
Revenue per Student
$
Growth
vs. P.Y.
2.9%
4.8%
Tuition per Course
6.2%
4.5%
Per Course
Full-time undergraduate
$1,100
Part-time undergraduate
$1,150
Graduate
Revenue – Other Factors
Seats per student
Tuition per seat (i.e., student mix)
Drop rate
Corporate/military discounts
Fee income
Interest income on loan portfolio
Textbook income
Scholarships and awards
Employee discounts
$1,460
Revenue - Reclassification
Employee discounts and scholarships & awards will be
treated as reductions to revenue rather than as operating
expenses in 2004, and textbook and related revenue will be
treated as revenue instead of as other income.
The accounting reclassification of these items are largely
offsetting with regards to revenue growth, but have a
positive impact on operating margin.
P&L – Operating Expenses
Instructional & Educational
Selling & Promotion
General & Administrative
Instructional & Educational Expense
Types of I&E Expense
I&E as % of revenue
Deans
Full-time/part-time professors
Academic assistants
Facility costs
Technology licenses
Computer labs/LRC
Classroom equipment & supplies
Datalines
Selling and Promotion Expense
Types of S&P Expense
S&P as % of revenue
Admissions officers &
assistants
%
Marketing and business
development personnel
Advertising
Trade shows
General & Administrative Expense
Types of G&A Expense
G&A as % of revenue
14.7
Student service officers and
representatives
Corporate staff
Public company expenses
Business licenses & taxes
Bad debt expense
Operating Margin
Operating
Margin
New
Campuses
Opened
7
34.5%+
6
5
5
5
4
3
3
3
2
1
1
Bad Debt Expense
Bad Debt
(% of Revenue)
(% of Revenue)
%
Cohort Default Rate
Strayer Cohort Default Rate
FFEL Program Loans
%
Investment Income
Investment Income
3.8
$M
Income Taxes
Effective Tax Rate
%
Balance Sheet
Student Loan Receivable
Sold student loan portfolio in Q4 2003
Liability recorded for potential claims under
indemnification agreement but no credit risk assumed
May continue to originate loans for resale but will not be
in long-term lending business
Secondary Offering
Converted all but $20 million in preferred stock to common stock
on March 15, 2004
Expect to convert remaining preferred shares in June 2004
Annualized cash savings of $2 million at current dividend level as
well as elimination of dilutive PIK dividend
Cash Flow
Cash Flow
Capital Expenditures
(% of Revenue)
Net Income/Operating Cash Flow
(Growth vs. Prior Year)
%
%
*
*
*
*Excluding campus building purchases in 2001 and 2002
* Excluding gains on asset sales
Redeployment of Excess Cash
1. Invest as much as possible in organic growth strategy
2. Maintain sufficient liquidity to do acquisitions
3. After 1&2 above, return cash to shareholders
Dividends (regular or special)
Share buybacks
Share buybacks
New Campus Economics
First Year Impact of
Opening a New Campus
Operating Income
(Amounts in $ millions, except enrollment data)
Student Quarters
125
Revenue
$0.2
Operating Costs
1.1
Operating Loss
($0.9)
Internal Controls
Internal Audit
Financial Aid
Dedicated internal audit
Experienced Director of